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Brotherly Love, Cheese Steaks And Biomed?


Science & Technology

BROTHERLY LOVE, CHEESE STEAKS--AND BIOMED?

On the whole, I'd rather be in Philadelphia--epitaph suggested by W. C. Fields for himself

Lots of people besides the great comedian have had a laugh at Philadelphia's expense, but not Hubert J. P. Schoemaker, chairman of Centocor Inc. In 1979, Schoemaker moved his company to Philadelphia from Boston to be near the Wistar Institute, the nation's oldest biomedical research center, where scientists had discovered an antibody that led to Centocor's first product, a test for pancreatic cancer. Today, Centocor has 10 products in the pipeline. And analysts say its revenues could quadruple to $300 million by 1993 on sales of Centoxin, a drug nearing approval that combats septic shock, a deadly infection usually contracted in hospitals.

Quietly, Philadelphia is becoming a hotbed of biomedical technology. Since 1986, at least 95 biotech startups have formed in greater Philadelphia, which stretches from Princeton, N. J., to northern Delaware. This brings the total there to 157 (table). The area "has eclipsed Boston" as a biomed center and may one day match California, says Henry M. Weinert, president of Boston Biomedical Consultants Inc.

There's good reason for the City of Brotherly Love to become the City of Biomed. A 1989 Arthur Andersen & Co. survey turned up 135 health-related companies in the region, including the U. S. offices of SmithKline Beecham and the Merck, Sharp & Dohme research unit of Merck. The old-line drug companies produce research and executive talent for startups, at least four of which are run by SmithKline alumni. For instance, Dr. Philip S. Schein, once SKB's worldwide vice-president for clinical research and development, now heads U. S. Bioscience Inc. Bioscience won approval in December for its first drug, Hexalen, which treats ovarian cancer.

The region's medical infrastructure gives biotech a further boost. Benjamin Franklin founded Pennsylvania Hospital, the nation's first, in 1751. Today, the area ranks behind only New York in number of medical facilities, and its 23 teaching hospitals and 5 medical schools help spawn startups. For instance, Dr. Michael A. Zasloff, of the Children's Hospital of Philadelphia, founded Magainin Sciences Inc. to develop new antibiotic drugs based on his research.

Local schools, including the University of Pennsylvania, Temple University, and Hahnemann University, plus research centers such as the Fox Chase Cancer Center and the Coriell Institute for Medical Research, also help in developing new drugs. Cephalon Inc. has licensed from Temple a test to measure sensitivity to chemotherapy. And it collaborates on research with professors at Hahnemann and Penn. Such networking has helped speed the design of a drug for Lou Gehrig's disease that Cephalon expects to test on humans soon.

TRENDS. The action in Philadelphia has attracted venture capitalists, who gave biotech its big push in California and Boston. Northern California still attracts roughly one-third more venture capital for biomed projects than its new East Coast competitor. But since 1987, some $294 million has been lavished on biomed startups around Philadelphia. And once-conservative academic institutions are now "open to more commercial collaborations," says Charles G. Hadley, general partner with Hillman Medical Ventures of Berwyn, Pa., which has more than $50 million invested in med-tech startups around the country.

Both trends made a difference to Dr. Margo P. Cohen. The founder of three-year-old Exocell Inc., which sells diagnostic tests for diabetes, chose Philadelphia because the Ben Franklin Partnership, a state-run startup fund, offered financial help, and because Penn's medical center has done clinical tests of the company's products.

As manufacturing has withered in Philadelphia, biotech has become "the foundation for the region's growth," says Marc Kramer, executive director of the Technology Council of Greater Philadelphia. More than 31,000 people work at area biomedical companies, says Arthur Andersen & Co. And every 100 of those jobs sustains 80 others in related industries, adds Anita A. Summers, a professor of public policy at Penn's Wharton School. This year, the Technology Council will launch its own $100 million venture fund. And top executives of Centocor, Rhone-Poulenc Rorer, and Sterling Drug are promoting the region to colleagues nationwide. With that kind of support, even skeptics may decide that, on the whole, Philadelphia is the place to be.Morton D. Sosland in Philadelphia


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